The aggregate supply curve illustrates that the
A) higher the price level, the greater the quantity of real GDP supplied.
B) higher the price level, the smaller the quantity of real GDP supplied.
C) aggregate demand curve is not needed to determine the aggregate price level.
D) price level does not affect the quantity of real GDP supplied.
E) amount of potential GDP increases when the price level rises.
Answer: A) higher the price level, the greater the quantity of real GDP supplied.
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You are given the following information about aggregate demand at the existing price level for an economy: (1) consumption = $400 billion, (2) investment = $40 billion, (3) government purchases = $90 billion, and (4) net exports = $25 billion. If the full-employment level of GDP for this economy is $600 billion, then what combination of actions would be most consistent with closing the GDP-gap here?
A. A decrease in government purchases and an increase in taxes B. An increase in government purchases and a decrease in taxes C. An increase in government purchases and taxes D. A decrease in government purchases and taxes
The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% chance that it could all be stolen. Bob is risk averse because
A) his utility function is concave. B) he has diminishing marginal utility of wealth. C) he is willing to pay a premium to avoid a risky situation. D) All of the above.
Suppose Japan exports televisions to the United States and imports sugar from Argentina. This situation suggests
a. Japan has a comparative advantage relative to the United States in producing televisions, and Argentina has a comparative advantage relative to Japan in producing sugar. b. Japan has a comparative advantage relative to the United States in producing sugar, and Argentina has a comparative advantage relative to Japan in producing televisions. c. Japan has an absolute advantage relative to the United States in producing televisions, and Argentina has an absolute advantage relative to Japan in producing sugar. d. Japan has an absolute advantage relative to Argentina in producing sugar, and the United States has an absolute advantage relative to Japan in producing televisions.
The table below shows the export and import values of automobiles, pharmaceuticals, and clothing in Country A and Country B. Country AExports ($Billions)Imports ($Billions)Automobiles2040Pharmaceuticals3030Clothing400Country BExports ($Billions)Imports ($Billions)Automobiles020Pharmaceuticals4040Clothing4535 The IIT share is zero for ________ in Country A and for ________ in Country B.
A. clothing; pharmaceuticals B. automobiles; pharmaceuticals C. clothing; automobiles D. pharmaceuticals; pharmaceuticals